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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: TheStockFairy who wrote (5524)	6/1/2002 7:12:09 PM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 46821

TSF, Since I used your alias in this message that I sent to a GTF poster, I may as well afford you the opportunity to critique it for me. -------- Joe, it just occurred to me that I never addressed (I dare not say 'answered' with any level of assurance;) your main question, and that was, What will the eventual impact be on equipment and component demand as a function of all of this carrier shaking out? Rather than say what should or will happen, I'd like to posit on what might happen, in very simplistic terms, based on several outcomes in the carrier space. Let's look at two extreme cases, first, and then at a gradient or two in between. * If all of the startups and green fielders who have failed, in total, cannot come out of bankruptcy, then I would look to an upswing in the LUs, TLABs and ALAs of the world. ILECs and PTTs just love their SONET/SDH and switching gear. But don't spend too much time brooding over the fact that a lambda for every user is not going to happen anytime during this 21st century. Look to invest in The Stock Fairy's Ostrich Farm, instead. * If a majority of the larger startups and green fielders come out of bankruptcy swinging, you may see some acceleration in the interest for next generation gear once again, based on protocols and optical technologies that the incumbents would otherwise prefer not to touch. This will put the incumbents back in their "watch" mode, where they make claims to be "productizing" and pursing rollouts of next-gen fill-in-the-blanks, sometime soon, but never do. However, with a majority of these players back in the fray, I'd look to a repeat of the negative effects brought on by severe price competition once again. This, imo, would result in another wave of failures, and then we'd be back to square one, or somewhere not far off. * If a smaller number of very large startups were to successfully restructure and come out swinging, then this would result in a chance that both the incumbents and the startups would fuel demand for next gen optical and multiprotocol platforms. I think that this is what's going to happen, either during this wave, or following the second wave of failures, as I alluded might occur, above. Those are all big ifs, and I'm sure that two years from now one will have had to be an expert in chaos theory to fully understand all of the dynamics that took place to get there. In any event, based on the bleeding that's taking place now, and the declining margins of even the largest incumbent carriers, I don't see any of this playing into anyone's fortunes purely from the standpoint of increased demand for bandwidth and services anytime soon. Without some modicum of successful re-emergence of some of the largest failed players, I don't look forward to very much in the way of innovative taking place, even without a Tauzin-Dingell victory. The bottom line is: We need more competition, but not too much of it. How's that for a final note, eh? FAC